Dalton McGuinty was premier of Ontario from 2003 to 2013.
"There's no free lunch." I hated it went my dad used to say that. It meant I was going to have to pay up. He wanted me to understand there is almost always some kind of cost that has to be paid if you want to receive benefits. My father's words came back to me as I listened to the recent reports about the costs of Ontario's electricity system. These reports have sparked a healthy debate. But the best debates are the best informed. To help shed more light, I have some insights that can help inform the debate around the costs of our electricity.
When we formed the government in 2003, we discovered pretty quickly that after years of neglect, Ontario's electricity system was in desperate need of costly repairs and new investment. In the previous decade, electricity generation had fallen by 6 per cent while demand had grown by 8 per cent. During the summer of 2004, we made an extraordinary request of Ontarians asking them to dramatically reduce their electricity usage because we didn't have the power to meet demand.
What's more, our electricity system had become a huge North American contributor to air pollution. At the same time the previous government had increased our reliance on coal by 127 per cent, doctors were warning us that our coal plants were responsible for 1,800 premature deaths and more than 300,000 cases of illness every year. The single greatest cause of children visiting Ontario hospitals was asthma, aggravated by bad air. Economists told us coal was costing us $4.4-billion every year in health and environmental costs.
In the face of our massive energy deficit, our government made similarly massive investments in the system. We invested more than $10-billion to rebuild 7,500 kilometers of transmission lines – the distance from Toronto to Moscow – because, as one hydro worker told me: "You know, those wooden poles don't last forever." We also invested more than $21-billion in new generation – including doubling our output from Niagara Falls and retrofitting our nuclear plants. All this work created thousands of Ontario jobs, too.
We moved aggressively to clean up our power system by shutting down our coal plants. In 2005, our coal plants caused 52 smog days, including smog days in Algonquin Provincial Park, a three-hour drive north of Toronto. Now that all our coal plants have been closed, smog days are a thing of the past. Teachers tell me that while puffers have not completely disappeared from the classroom, they are much less common today.
A big reason Canada has residual credibility in the climate change talks is because shutting down Ontario coal plants was the biggest single CO2 reduction in all of North America. It was like taking seven million cars off the road. If those plants were still operating today and we had to pay the going rate of $30 per tonne of CO2 emissions, Ontario ratepayers would be saddled with more than $1-billion in annual costs – not to mention the black eye we would all be sporting in the international community. Yet at the time, many people and institutions opposed our government's decision to shut down our coal plants.
Along with shutting the door on coal, our government opened the province to clean, renewable energy – which made Ontario a leader in wind and solar-power generation. Ontario has gone from 10 wind turbines to more than 2,000 today. Canada's largest wind farm and one of North America's biggest solar farms are both in Ontario. This is the result of more than $27-billion in private-sector investment creating over 30 manufacturing businesses and 42,000 new jobs.
Our government also insisted that Ontario be the first place in the world to install a smart meter in every home, opening up new opportunities for conservation and demand-management programs.
Ontario's electricity system isn't perfect and it's important to understand and work hard to address its shortcomings. But we must also recognize that we have come a long way from the dirty, unhealthy, unreliable and badly underinvested system we used to have – a system that today would be costing us more than $5-billion annually in health, environmental and carbon costs. So, yes, there are real costs to having a clean, modern and reliable electricity system. There is no free lunch.